In the wake of foreclosure problems stemming from improper documentation and representation, a title insurance policy has never been more valuable than it is right now in this current real estate market.
Clients often ask: What exactly does a title company do? And the easiest answer that I give them is, “Take a look at our website and view the videos.”
At Federal Title, we conduct an extensive search of public records to verify the seller’s right to transfer ownership. The purpose of all this research is to discover claims or defects (a.k.a. “clouds”) that limit the owner’s right in transferring the property.
Lenders require title insurance when the purchaser obtains a mortgage to finance the purchase; this type of insurance is often called a lender’s title insurance policy to cover the bank’s interest in your property and to safeguard first position as a lien holder on your property.
At the time of closing an owner’s title insurance policy is also issued which protects you as the purchaser at the closing. An owner’s policy is your assurance of protection against economic loss if a title defect is ever discovered and a claim filed against your property.
The insurance premiums are only collected once, and your coverage will remain consistent for as long as you or your heirs retain an interest in your property or until you refinance the property at which point a new policy is issued.
Without the protection of an owner’s policy, you may be in jeopardy of losing your investment which stems from a cloud on title that does not appear in the public records such as:
- Forged legal instruments (deeds, mortgages, wills, releases of mortgages)
- Improperly recorded legal documents
- False impersonation of the true property owner
- Undisclosed heirs
- Issues involving improper marital status
- Documents executed under false powers of attorney
- Deeds drafted by persons lacking legal capacity
- Undisclosed spouses
- Issues of rightful possession of land; which arise when a foreclosed property owner claims that they did not receive proper notice of the foreclosure.
In the event that a claim is filed against you as owner of your property, the title insurance will cover your legal expenses, court costs and related fees. If the claim against the property is valid, then the title insurance company will reimburse you for your loss up to the amount of the policy.
At Federal Title our attorneys are diligent in reviewing all documentation in an effort to assist buyers with the often times unexpected yet frequent legal matters that arise during the purchase and sale of real property. At Federal Title and Escrow there is always an attorney title agent on each transaction that is prepared to explain, negotiate and if needed, represent your legal interests in every transaction.